Peer-to-Pool Liquidity

At the core of Peer-to-Pool liquidity provision is that the LP acts as a counterparty to the trader and fills orders without slippage, making it the most capital-efficient derivative liquidity provision model.

In the order book model, the longs and shorts are counterparties to each other in the perpetual contract. The profit of longs is the loss of shorts, while the funding rate is transferred between longs and shorts, and the exchange is the recipient of trader's commission and clearing penalty.

In Qilin V2, LP is the counterparty of all traders. The profit of traders is the loss of LP, and the loss of traders is the profit of LP. LP receives the trading fee and the funding rate as sources of income. In addition, LP can participate as liquidators to earn liquidation fees.

LP's losses and profits are shared equally based on the share of each LP’s liquidity deposit in the Pool.